Biggest U.S. States Report Employment Gains as Economy Recovers

California, Texas, Florida and New
York, the four biggest states, all added jobs last month for the
first time since May as the U.S. economic recovery stoked demand
for labor.

California, the largest state, said yesterday that non-farm
jobs rose by 39,000, the most since May 2006; Texas, the second-
biggest, added 47,900 and Florida, with the fourth-largest
population, gained 6,900. New York, the third-biggest state,
said Nov. 18 it added 40,500 private-sector jobs, the most since
April 2005.

The gains could help states shrink budget deficits that the
Center on Budget and Policy Priorities says will likely total
$140 billion in fiscal 2012, as new jobholders boost income- and
sales-tax collections. States’ tax revenue grew about 6 percent
in the three months that ended Sept. 30, the third consecutive
increase, Goldman Sachs Group Inc. said.

“The outlook for the state and local sector has improved
over the last several months, as revenues have picked up or at
least stabilized in most states,” Goldman’s Alec Phillips said
in a note to clients yesterday.

National employment rose in October for the first time in
five months, the Labor Department said Nov. 5. Payrolls climbed
151,000, exceeding all estimates in a Bloomberg News survey of
economists.

Gross domestic product expanded 2 percent in the third
quarter, topping the 1.7 percent growth of the second period.
Economists surveyed by Bloomberg News predict 2.4 percent
expansion for the fourth quarter.

National Pick-Up

“It is mildly encouraging that we are seeing some kinds of
labor-market improvements in certain parts of the country,”
said Paul Dales, U.S. economist for Capital Economics Ltd. in
Toronto. “We have seen that kind of pick-up in the national
economy as well.”

The U.S. jobless rate was unchanged at 9.6 percent in
October even with the expansion of payrolls. That was the case
for the four biggest states: California’s held at 12.4 percent,
Texas’s at 8.1 percent, Florida’s at 11.9 percent and New York’s
at 8.3 percent.

That may indicate that improving economic conditions
prompted more people to look for jobs, said Julia Thornton
Snider, an economist at the Anderson School of Management at the
University of California Los Angeles.

“It might mean young people are looking for their first
jobs or people who had been discouraged are now hearing things
are getting better and they are starting to look again,” she
said in a telephone interview.

Reversal of Declines

The October job gains in New York, California and Florida
came after declines in September, a month when Texas gained
3,700 jobs.

The jobless rate in California, with the world’s eighth-
largest economy, has been 12 percent or more for the past 15
months, according to data compiled by Bloomberg.

The state, home to Silicon Valley computer makers Apple
Inc. and Hewlett-Packard Co., had the nation’s third-highest
unemployment rate in September, trailing only Nevada’s 14.4
percent, and Michigan, at 13 percent, according to U.S. Labor
Department figures.

“October’s gain of 39,000 jobs marks the first solid month
of recovery,” said Stephen Levy, director and senior economist
at the Center for Continuing Study of the California Economy in
Palo Alto. “If these gains are confirmed in the following
months, California will have finally turned the corner.”

Texas Low for the Year

Texas gained 172,800 non-farm jobs in the last year, the
state’s labor department said yesterday. The 8.1 percent October
unemployment rate was the lowest of 2010, it said.

Florida added 35,700 jobs in the last 12 months, the state
said, the largest year-over-year growth since May 2007.

“We continue to see positive signs of stabilization and
growth,” Cynthia R. Lorenzo, director of the Agency for
Workforce Innovation, said in a statement. “Florida posted the
largest decrease in the country last week in the number of
people who filed for first-time unemployment benefits.”

New York state said Nov. 18 that its largest job gains over
the past year were in professional and business services, with
an increase of 31,700 positions, and educational and health
services with 25,300.

City Gains

The gains were helped by an increase in private employment
in New York City, the nation’s most-populous, which added 41,900
jobs in October, more than twice the 10-year average monthly
gain. Jobs in professional and business services, such as legal,
accounting and advertising, increased by 14,600.

“An important aspect of these jobs is that they tend to be
well paying,” Kevin Jack, an economist at the state’s labor
department, said in an interview.

States won’t return to full fiscal health anytime soon at
the current rate of employment growth, said Nicholas Johnson,
director of the State Fiscal Project at the Center on Budget and
Policy Priorities in Washington.

“It’s great that it’s growing, but it’s growing slowly,”
Johnson said. “We need rapid jobs growth to make up for all the
lost jobs and the lost time.”